Jam-packed edition

This edition is jam-packed with good info.

In our first story, we report on Zillow’s seller survey which gives us lots of good insights into why sellers are looking to sell (in fact, there were so many good insights we couldn’t fit them in this newsletter).

In our second story, we look at the Top 10 markets with the biggest annual increases in home prices. Scroll down to see which city tops the list with a big 28.7% jump!

And on the subject of jumps, in our third story, we look at the massive rise in office-to-apartment conversations. Although, we also explain why the jump isn’t that massive depending on how you look at it.

Now let’s get into today’s Blueprint!

– James and David

1 in 5 homeowners are looking to sell in next 3 years

19% of homeowners either have their homes listed for sale or are considering selling their homes within the next three years. 48% of those homeowners intend to sell in the next year, while 36% intend to sell within the next 2-3 years. That’s according to Zillow’s latest market update.

Here are the top reasons why these homeowners are either selling or planning to sell:

• 56% found other homes they prefer over their current one

• 55% want an upgraded home with better features

• 49% plan to sell for a profit or use their home equity

• 45% think they can sell for more now than in the future

• 41% cited a shrinking household

• 39% believe they’ll get a better deal on a new home now

• 34% cited a growing households

Our take

We highly recommend Zillow’s latest report. It’s packed with so many insights we couldn’t cover in our summary. The key takeaway? There are a substantial number of homeowners looking to sell, and this presents a major opportunity for agents. Use this report to tailor your pitch to sellers' motivations and market to them strategically.

We’re giving away an Amazon gift card valued at $250 USD and a 1-year membership to our new luxury real estate program, Estate Elite (valued at $1500), to both new and existing subscribers to the Blueprint Newsletter. Here’s how to enter:

1. Subscribe to the Blueprint Newsletter (if you haven't already!)

2. Follow us on Instagram: @estateeliteagents & @readtheblueprint

3. Tag TWO friends on our Instagram post

4. Fill out the survey included in the newsletter (it’s quick and easy!)

Entry closes at 6 PM (PST) on February 28, 2025, and two winners will be announced on Instagram on March 4, 2025. Click here to enter!

Metros with the largest home price increases

Home prices rose in the vast majority of U.S. metro areas at the end of last year, with the top 10 cities experiencing gains of at least 14.9%. That’s according to the National Association of Realtors' quarterly report. 5 of the top 10 metros with the largest year-over-year median price increases were in the Midwest, while the rest were in the South and Northeast.

Here are the metros with the largest annual home price percentage increases:

1. Jackson, MS – 28.7%

2. Peoria, IL – 19.6%

3. Chattanooga, TN – 18.2%

4. Elmira, NY – 17.6%

5. Fond du Lac, WI – 17.6%

6. Cleveland, OH – 16.4%

7. Bismarck, ND – 15.8%

8. Akron, OH –15.5%

9. Blacksburg, VA –15.0%

10. Canton, OH – 14.9%

Our take

In these markets, strong demand has kept inventory below pre-pandemic levels, driving up prices as buyers compete for limited homes. While rising home values benefit property owners, they pose challenges for renters hoping to buy. In much of the country, many prospective buyers have stepped back due to mortgage rates hovering near 7%. However, the Midwest has continued to attract buyers seeking affordable housing near thriving business centers.

Markets with the most office-to-apartment conversions

The number of converted office-to-apartment units has surged an astonishing 484% in the past few years, jumping from 12,100 in 2021 to a whopping 70,700 currently. This striking statistic comes from RentCafe’s latest update via ResiClub. 

These conversions account for 42% of the 169,000 residential units currently being repurposed from commercial properties. This is followed by hotel-to-apartment conversions at 22%, factory-to-apartment at 11%, and warehouse-to-apartment at 6%.

Here are the top 10 markets with the highest number of office-to-apartment conversions:

1. New York, NY – 8,310

2. Washington, DC – 6,533

3. Los Angeles, CA – 4,388

4. Chicago, IL – 3,606

5. Dallas, TX – 2,725

6. Atlanta, GA – 2,239

7. Minneapolis, MN – 1,873

8. Charlotte, NC – 1,787

9. Cincinnati, OH – 1,753

10. Kansas City, MO – 1,676

Our take

This is excellent news, and we fully support it. We want to encourage more conversions but also remain realistic. While this trend is promising, transforming commercial buildings into residential spaces is costly and will only do a little to solve the country’s housing shortage. Office-to-residential conversions only make up a small portion of the overall housing market. However, they are a good step in the right direction!

The news that just missed the cut

• The end of the ‘California Exodus’ storyline 

• Updated list of all Trump’s actions that impact housing

• How to turn your real estate business into a listing machine

• How to hire the right people in your business

• What would happen to mortgage rates if conservatorship ends for Freddie and Fannie

Foundation Plans

Advice from James and David to win the day

You can’t be all things to all people, especially in real estate. We think that it’s best to focus your skills into a particular niche and become a specialist in that area. That way, you rise above the ranks by setting yourself apart. Today, we’d like to offer you some tips on how to differentiate yourself:

Geographic area –  Farming a particular area is the most common way to position yourself in a market. However, it can also make you vulnerable to competition. Other agents can claim to specialize in the same neighborhood as you, so you don’t want this to be your only point of differentiation. Showcase other things that set you apart, such as your ability to get clients to the closing table faster or your passion for matching high-end buyers with homes that reflect their affluent lifestyle, and so forth. 

Customer type – This is often used to target specific clientele, such as first-time home buyers, veterans, tech workers, nurses, or seniors. It can be extremely effective if you have a strong connection to a particular group of people. Let’s say you decide to focus on seniors who are preparing to downsize. That doesn’t mean you’ll never work with another first-timer again. It simply means you don’t spend your time and money marketing to them. The majority of your attention is focused on your clientele group.

Property type – Agents can specialize in a specific type of property, such as manufactured homes, condos, or homes by the waterfront. It can reassure your customers to know that you concentrate on exactly what they are seeking. The downside to this niche is that the market may change; condos may suffer as first-time buyers pull out of the market, or waterfront homes may be in short supply or have little attrition over time. Protect yourself by combining this niche with other ways you can specialize.

Specific expertise —You can showcase knowledge in other areas, such as negotiations, contracts, home staging, lending options, construction, or remodeling. Agents who enter real estate as a second career can use their experience in a closely related industry, such as mortgage banking or contracting.  

To learn how to find your niche as an agent, start here.

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Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

We can’t emphasize enough Buffett’s message: Don’t let events and people set your agenda in life. Stay ruthlessly focused on your goals. We hope you crush it this week, friends!

We’ll see you back here on Friday!

– James and David